The U.S. Supreme Court today ruled 6-3 in favor of letting the Patient Protection and Affordable Care Act (PPACA) public exchanges operated by the U.S. Department of Health and Human Services (HHS) continue to offer PPACA premium subsidy tax credits.
The petitioners in the case, King v. Burwell (Case Number 14-114), argued that PPACA clearly gives state-established exchanges the authority to offer the tax credits but does not say whether HHS-established exchanges can do so.
HHS Secretary Sylvia Burwell and other Obama administration officials have argued that the intent of PPACA as a whole is obviously to expand access to health coverage through the premium tax credit system, and that keeping the HHS-established exchanges from offering the tax credit would conflict with that goal, by shutting lower-income consumers out of the market and saddling the insurers still in the market with a sicker pool of enrollees who would be much more expensive to cover.
What Your Peers Are Reading
Chief Justice John Roberts writes in an opinion for the majority that the petitioners are correct that the language of the PPACA HHS exchange tax credit provision is ambiguous.
But, here, given the intent of the PPACA premium tax credit program as a whole, “the statutory scheme compels us to reject petitioners’ interpretation because it would destabilize the individual insurance market in any state with a federal exchange, and likely create the very ‘death spirals’ that Congress designed the act to avoid,” Roberts writes.
Roberts cites an earlier ruling in which the court held that the court cannot interpret federal statutes to negate their own stated purposes.
Roberts also cites a study suggesting that eliminating the tax credit in the HHS exchanges could increase premiums by 47 percent and cut enrollment by 70 percent, and another study suggesting that eliminating the tax credit could increase premiums by 35 percent and cut enrollment by 69 percent.
“It is implausible that Congress meant the act to operate in this manner,” Roberts writes.
Justices Antonin Scalia, Clarence Thomas and Samuel Alito dissented.
Scalia writes that the majority’s interpretation of the PPACA premium tax credit language is “of course quite absurd.”